Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-60548 November 10, 1986

PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner,

vs.
HON. BENJAMIN RELOVA, in his capacity as Presiding Judge, Court of First Instance of Manila, Branch XI,
PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, CAPITOL WIRELESS, INC. and RADIO
COMMUNICATIONS OF THE PHILIPPINES, INC., respondents.

Franklin M. Drilon for petitioner.

Andres T. Velardo, Dante P. Mercado, Edgardo D. Rivera, Mila T. Federis and Celedonio P. Balasbas for
respondents.

FERIA, J.:

In this petition for review on certiorari, the Philippine Global Communications, Inc., seeks to set aside
the decision, dated April 27, 1982 rendered by respondent Judge Benjamin Relova of Branch XI of the
then Court of First Instance of Manila in Civil Case No. R-82-37 21 entitled "In the Matter of the Petition
for the Declaratory Judgment Regarding the Construction of the R.A. Nos. 4617 and 4630," the
dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered declaring respondent Philippine Global

Communications, Inc., without authority to establish, maintain and operate, apart from its
single principal station in Makati, any other branch or station within the Philippines.

In view of the foregoing resolution on the main petition, the counterclaim interposed by
respondent must be, as it is hereby, DISMISSED.

At this juncture, it may not be amiss to invite attention to our decision in the case of Metropolitan
Waterworks and Sewerage System vs. The Court of Appeals and City of Dagupan, G.R. No. L-54526
promulgated on August 25, 1986, which pointed out the common error of joining the court or judge who
rendered the decision appealed from as a party respondent in an appeal by certiorari to this Court under
Rule 45 of the Rules of Court; when correctly the only parties in an appeal by certiorari are the appellant
as petitioner and the appellee as respondent: and it is in the special civil action of certiorari under
Section 5 of Rule 65 of the Rules of Court where the court or judge is required to be joined as a party
defendant or respondent.

The antecedent facts in this case are briefly as follows:

On May 10, 1976, petitioner filed with the Board of Communications (BOC), now the National
Telecommunications Commission, an application for authority to establish a branch station in Cebu City
for the purpose of rendering international telecommunication services from Cebu City to any point
outside the Philippines where it is authorized to operate. Said application was opposed by private
respondents.
Meanwhile, on March 24, 1977, while petitioner's application was pending, the BOC issued
Memorandum Circular No. 77-13 designating the Metropolitan Manila area as the sole gateway" (point
of entrance into or exit from) for communications in the Philippines and defining what constitutes
"domestic record operations.

On January 16, 1979, the BOC granted petitioner provisional authority to establish a station in Cebu
City "subject to the condition that as soon as domestic carriers shall have upgraded their facilities,
applicant shall cease its operation and interface with domestic carriers. " Then, on May 24, 1979, the
BOC granted petitioner final authority to establish a "branch/station" in Cebu City and, subject to its
prior approval, anywhere in the Philippines. Respondents filed a joint motion for reconsideration of said
decision.

On August 27, 1979, pending resolution of the joint motion for reconsideration, private respondents
filed with the lower court a petition for declaratory judgment regarding the proper construction of
petitioner's franchise, R.A. No. 4617. Petitioner moved to dismiss the petition but said motion was
denied. Petitioner then assailed the aforesaid order on the ground of lack of jurisdiction, but this Court
sustained the lower court and held that the suit for declaratory relief fell within the competence of the
Judiciary and did not require prior action by the administrative agency concerned under the concept of
primary jurisdiction. (G.R. No. L-52819, October 2, 1980, 100 SCRA 254)

After the issues were joined, the parties at the pre-trial conference agreed to submit the case for
decision on the bases of their respective pleadings and memoranda because the issues involved are
legal. On April 27, 1982, the lower court rendered the judgment above quoted. Hence, this petition.

The legal issues raised in this petition are as follows: (1) Whether or not petitioner is authorized under
its legislative franchise, Republic Act No. 4617, to establish stations or substations in places or points
outside Metropolitan Manila; and (2) Whether or not the establishment of such stations or substations
constitutes "domestic service" within the terms of petitioner's legislative franchise.

In its Second Supplemental Memorandum filed on July 16, 1984, petitioner belatedly claims that the
declaratory judgment was improperly made, as it was based on the pleadings alone, although the
declaratory relief petition presented genuine issues of fact that required trial. Considering, however, the
above-stated agreement of the parties to submit the case for decision on the basis of their respective
pleadings and memoranda (petitioner's brief, p. 14 and respondents' brief, p. 12), the lower court could
not be faulted for rendering judgment accordingly.

However, we rule that the lower court erred in rendering the decision appealed from, inasmuch as the
same is contrary to the provisions of petitioner's legislative franchise (R.A. No. 4617) as well as the
contemporaneous construction placed upon it by the governmental agency charged with its
enforcement and the opinion of the former Secretary of Justice.

Section 1 of petitioner's franchise provides:

Section 1. — There is hereby granted to the RCA Communications Inc., hereinafter

referred to as the Grantee, the right and the privelege of constructing, maintaining and
operating communications system by radio wire, satellites, and other means now known
to science or which in the future may be developed for the reception and transmission of
messages between any point in the Philippines to points exterior thereto, including
airplanes, airships or vessels even though such airplanes, airships or vessels, may be
located within the territorial limits of the Philippines.
RCA Communications, Inc. was subsequently renamed Philippine Global Communications, Inc., herein
petitioner.

It is always timely to reiterate that: "the first and fundamental duty of courts, in our judgment, is to apply
the law. Construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them. "(Lizarraga Hermanos vs. Yap Tico, 24 Phil. 504, 513; Republic
Flour Mills, Inc. vs. Commissioner of Customs, 39 SCRA 269)

Moreover, legislative intent must be ascertained from a consideration of the statute as a whole. As the
Court reiterated in the case of Aisporna vs. Court of Appeals:

... The particular words, clauses and phrases should not be studied as detached and
isolated expressions, but the whole and every part of the statute must be considered in
fixing the meaning of any of its parts and in order to produce harmonious whole. (Araneta
vs. Concepcion, 99 Phil. 709; Tamayo vs. Gsell, 35 Phil. 953; Lopez vs. El Hogar Filipino,
47 Phil. 249; Chartered Bank vs. Imperial, 48 Phil 931) A statute must be so construed
as to harmonize and give effect to all its provisions whenever possible. (People vs.
Polmon, 86 Phil; 350) (113 SCRA 459,466; April 12, 1982)

The lower court held that the word "any" in the abovequoted Section 1 of the law means a single point
within the Philippines where petitioner at its choice, subject to approval by the proper governmental
agency, can establish and maintain a reception and communication station or system. It also held that
the establishment, maintenance and operation of franchise or stations anywhere in the Philippines or
even within Metropolitan Manila outside or apart from petitioner's principal or main station in Makati
constitute "domestic communication service" in violation of Section 17 of said law.

However, a reading of other sections of the law aside from Sections 1 and 17 cited by the lower court
would lead to no other conclusion than that said law authorizes petitioner to construct, maintain and
operate, apart from its principal station in Makati, other stations or branches within the Philippines for
purposes of its international communications operations.

Section 3 of the law provides that "for the purpose of carrying out the privilege granted herein, the
grantee may establish stations in such places in the Philippines as the grantee may select and the
Secretary of Public Works and Communications may approve.

Section 4 (a) provides that "the Secretary of Public Works and Communications shall have the power
to allot to the grantee the frequencies and wave lengths to be used thereunder and determine
the stations to and from which each such frequency and wave lengths may be used, and issue to the
grantee a license for such use. "

Section 6 provides that "a special right is reserved to the Government of the Republic of the Philippines,
in time of war, insurrection, or domestic trouble, to take over and operate the said stations upon the
order and direction of any authorized department of the Government of the Philippines, such
department to compensate the grantee for the use of said stations during the period when they shall
be so operated by the said Government. "

Section 9 provides that "the grantee shall hold the national, provincial, and municipal governments of
the Philippines, harmless from all claims, accounts, demands, or actions arising out of accidents or
injuries, whether the property or to persons, caused by the construction or operation of the stations of
the grantee."
With respect to the principle of contemporaneous construction of a statute by the executive officers of
the government whose duty it is to execute it, it is well to reiterate that:

... As far back as In re Allen, (2 Phil. 630) a 1903 decision, Justice McDonough, as
ponente, cited this excerpt from the leading American case of Pennoyer v. McConnaughy,
decided in 1891: "The principle that the contemporaneous construction of a statute by the
executive officers of the government, whose duty it is to execute it, is entitled to great
respect, and should ordinarily control the construction of the statute by the courts, is so
firmly embedded in our jurisprudence that no authorities need be cited to support it.' (Ibid,
640. Pennoyer v. McConnaughly is cited in 140 US 1. The excerpt is on p. 23 thereof. Cf.
Government v. Municipality of Binalonan, 32 Phil, 634 [1915]) There was a paraphrase
by Justice Malcolm of such a pronouncement in Molina v. Rafferty, (37 Phil. 545) a 1918
decision:" Courts will and should respect the contemporaneous construction placed upon
a statute by the executive officers whose duty it is to enforce it, and unless such
interpretation is clearly erroneous will ordinarily be controlled thereby. (Ibid, 555) Since
then, such a doctrine has been reiterated in numerous decisions. (Cases cited) (Philippine
Association of Free Labor Unions [PAFLU] vs. Bureau of Labor Relations, August 21,
1976, 72 SCRA 396, 402)

In its decision of May 24, 1979 granting petitioner final authority to establish a branch/station in Cebu
City, the BOC construed the legislative franchise of petitioner, as follows:

It was the earlier contention of this Board when it issued Memorandum Circular No. 77-
13 (See incl. 1 of said Circular) that no international record carrier could establish stations
in any point of the country, for purposes of carrying out its international record operations
except in Metropolitan Manila Area. However, a careful review and deliberation on the
stand taken by the applicant herein as discussed in position paper it submitted to the
Board on February 21, 1978 and a cursory review of the individual franchises of each
international carrier as well as of an earlier opinion expressed by the Secretary of Justice
to the Chairman of the defunct Radio Control Board has convinced the board that by
virtue of applicant's franchise, Memorandum Circular No. 77-13 is not violated by
authorizing applicant to establish a branch station in Cebu City solely for its international
record operations. In view thereof and in the interest of continued efficient, adequate and
satisfactory services, the Board of Communications hereby makes final the provisional
authority granted to applicant herein on January 16, 1979 not only on the grounds stated
in said Order but also for reasons that subject to the approval of this Board, applicant may
establish branch stations in any point within the country for the purpose of receiving and
transmitting messages to countries outside the Philippines where it is authorized to render
international telecommunications services in accordance with its franchise and
Memorandum Circular No. 77-13. Metropolitan Manila remains to be the 'sole' gateway;
hence, all messages received and transmitted in the course of a carrier's international
record carrier operation, must be coursed through said gateway.

The earlier opinion of the Secretary of Justice referred to in said decision was the opinion rendered by
Secretary of Justice Pedro Tuason on June 17, 1954 (Opinion No. 146), on the interpretation to be
given to the clause found in Section 1 of the original franchise granted to the predecessor-in-interest of
Globe-Mackay Cable and Radio Corporation (Act No. 3495 approved on December 8, 1928, as
amended by Act No. 3692 and Republic Act No. 4630). Globe-Mackay Cable and Radio Corporation
was originally one of the respondents in the Petition for Declaratory Judgment, but it was subsequently
dropped as a party respondent. The clause in question reads:
 The sending of commercial wireless telegraphic messages from points within the
Philippine Islands to points exterior thereto, including airplanes, airships, and vessels,
even though such airplanes, airships, or vessels be located within the territorial limits of
the Philippine Islands, and the receiving of commercial wireless messages from such
exterior points.

This clause is similar to that found in Section 1 of Republic Act No. 4630, approved on June 19, 1965,
which is Identical to Section 1 of Republic Act No. 4617 except as to the name of the grantee.

The opinion of the Secretary of Justice states:

... In Opinion No. 76 the view taken was that a message, to fall within the purview of the
franchise, once sent by a transmitter within the Philippines, cannot be received by any
station within the Philippines even for the purpose of retransmitting such message to
points outside the Philippines. I believe that the interpretation given to the above-quoted
clause was too strict and does not conform with the spirit of said provision. I take the view
that the franchise has reference to the destination of the message and not to the manner
of transmittal. Not as to whether it should be sent to the point of destination directly or
through relays. The reservation in favor of the Philippine Government under section 4 of
the franchise of "all wire- less communications between points of stations within the
Philippine Islands' is clearly intended to refer only to domestic communications.

It should be understood, however, that no extra fees or tolls could be collected for the
transmittal of messages from a relay station to the principal station in Manila. For to do
so would make it a domestic service and would bring such service in competition with the
domestic radio and telegraph service of the Bureau of Posts.

The above-quoted opinion was reiterated and reaffirmed by the Undersecretary of Justice on November
28, 1973, in answer to the query of the Acting Chairman of the Foreign Trade Zone Authority as to
whether or not Globe-Mackay Cable and Radio Corporation is "authorized under its franchise to set a
relay station inside the Foreign Trade Zone in Mariveles, Bataan, which will receive interstate
communications for onward transmission by its main station in Manila.

The above-stated opinions of the Secretary of Justice and Undersecretary of Justice are material
because Republic Acts Nos. 4630 and 4617 are in pari materia. As the Court has reiterated:

Statutes are said to be in pari materia when they relate to the same person or thing, or to
the same class of persons or things, or have the same purpose or object. (Sutherland
Statutory Construction, Vol. 11, pp. 535-536) When statutes are in pari materia; the rule
of statutory construction dictates that they should be construed together. (Black on
Interpretation of Laws, Sec. 106) ... (City of Naga vs. Agna, May 31, 1976, 71 SCRA 176,
184)

Finally, on October 25, 1983, the National Telecommunications Commission, with the approval of the
Ministry of Transportation and Communications, issued Memorandum Circular No. 08-8-83 which
adopted guidelines in the implementation of the government policy of designating Metropolitan Manila
as the international gateway for purposes of domestic and international communications opera- tions.
Among the provisions of said Memorandum Circular which are pertinent to the case at bar are the
following:

1.1. The International Record Carriers (IRCs) shall continue to own, construct and
expand, as may be required by the service, their own stations, inside plant, branches and
 terminals within the Metro Manila Area necessary for them to conduct their business of
providing international telecommunications service in the country in accordance with their
respective franchise and as authorized by the appropriate government regulatory agency.

xxx xxx xxx

2.1 The IRCs shall not maintain public offices outside the gateway. They may, however,
be allowed to establish customer terminals with the necessary marketing and technical
support outside Metro Manila. ...

xxx xxx xxx

2.3. International telecommunications requirements of non- equipped or walk-in

customers shall be served thru the public offices of the domestic record carrier/s (DRCs).
All existing public offices of IRCs may continue operating until such time as the DRC(s)
can provide the facilities required by the IRCs or an Interconnect Agree- ment between
the IRC(s) and DRC(s) shall have been duly approved by NTC.

The last-quoted provision confirms that the existing public offices of International Record Carriers were
duly authorized by their respective legislative franchises.

WHEREFORE, the decision appealed from is reversed and judgment is hereby rendered declaring
petitioner with authority to establish, maintain and operate, in accordance with its franchise and
Memorandum Circular No. 08-8-83, any other branch or station within the Philippines apart from its
single principal station in Makati, Metro Manila.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz and Paras,
JJ., concur.

Feliciano, J., is on leave.